Npower parent RWE to cut 2,400 jobs

Npower parent RWE today announced another 2,400 job cuts across Europe and reported a 15% fall in UK earnings despite soaring demand for energy.

Most of the job losses are expected in Germany, where RWE is headquartered, but the group was unable to rule out cuts in the UK.

The move comes as it seeks to boost profits in the face of falling power plant margins, competition in the energy sector and the German government's decision to halt half of the country's nuclear power stations.

RWE had already announced plans earlier this year to slash 5,000 positions and axe a further 3,000 workers through divestments.

Peter Terium, chief executive of RWE, said the cuts were "essential to maintaining the market competitiveness of RWE".

"But we will be implementing them in a planned and transparent manner in full consultation with employee representatives," he added.

The group employs more than 12,000 people in the UK.

It is thought moves to create a new pan-European generating division overseeing all its power stations could lead to some job losses in the UK.

RWE has operations across the UK, including a major call centre in Newcastle and power stations in Wales, Didcot and Tilbury.

Its UK energy arm Npower, which is one of the big six energy suppliers with 6.5 million customers, saw operating profits slide to £262 million in the second quarter.

The group said higher demand for energy during the cold start to the summer was offset by a poor performance from power generation, which was also hit by a fire at its flagship power station at Tilbury in February.

But the fall in profits was far lower than in the first quarter - when earnings plunged 31% to £244 million - thanks to soaring energy demand in the retail arm.

Npower saw gas demand leap 11% in the first half as households turned on the heating amid a dire start to the summer.

The group has also hiked energy tariffs over the past year, by 15.7% for gas and 7.2% for electricity last October.

However, it has since lowered gas bills by 5%.

The wider RWE group, which is based in Essen, failed to increase sales in the first half of 2012, which remained broadly flat at 27.1 billion euro (£21.3 billion), while operating profits rose 9% to 3.6 billion euro (£2.8 billion).

PA